Cheng Daqi, Chow Yun-Fat, a fruit vendor from Chuansha, is arrested and imprisoned after being framed for murder. After he is saved by a military officer Mao Zai, Francis Ng Chun-Yu, he travels to Shanghai in search of a new life. In Shanghai, he meets mob boss Hong Shouting, Sammo Hung Kam-Bo, and becomes one of Hong's protégés. He also falls in love with Bao, a singer whom he eventually marries, Bao, Monica Mok Siu-Kei. Yet his true love remains Ye Zhiqiu, an opera actress from his hometown, Yuan Quan. When Hong unknowingly offends the son of the warlord General Lu and is captured by the general's men, Cheng negotiates with General Lu and persuades him to release Hong and invest in Hong's bank. A grateful Hong becomes sworn brothers with Cheng, raising Cheng's power and influence in Shanghai's burgeoning underworld.
Two decades pass, and a middle-aged Cheng has risen to be one of Shanghai's most influential tycoons. His circle includes his childhood ally Xiaopang and rival-turned-bodyguard Lin Huai, Lin Huai, Gao Hu. He maintains tight ties with Hong and Ling Husheng, Yuan Li. At the same time, his relationship with Mao Zai—now a general in the National Revolutionary Army—has become uneasy. He encounters Ye Zhiqiu again when she visits Shanghai, only to discover she is married to Cheng Zhaimei, an anti-government activist, Cheng Zhaimei, Xin Baiqing. The trio is drawn into the mounting tensions of the Second Sino-Japanese War, which erupts in 1937. After surviving an air raid and an abduction attempt by the Japanese, Cheng convinces Mao to help him arrange a safe escape for himself, Ye, and Ye's husband to Hong Kong, though Bao must remain behind as a hostage.
Following Shanghai's fall, Mao defects to the Japanese and becomes a provincial governor. The Japanese general Nishino schemes to install Cheng as a puppet mayor of Shanghai, prompting Mao to advise using Cheng's loved ones as leverage to lure him back. In Hong Kong, Cheng and Ye learn that Hong, Ling, and others have been captured, tortured, and humiliated by the Japanese.
Cheng and Ye return to Shanghai and reluctantly cooperate with the Japanese, planning to save their loved ones and assassinate Nishino. One night, while Nishino and Mao Zai are distracted by Ye and her opera troupe, Cheng, rejoined by Lin Huai, Xiaopang, and their mob, leads a raid on a Japanese military base where Hong, Ling, and the others are held. They free the prisoners but are too late to save Ling and Hong. Lin Huai sacrifices himself to halt the pursuing Japanese, while Cheng, Ye, and their allies strike the theatre, killing Nishino and several officers and collaborators. Mao flees backstage, holding Ye at gunpoint and threatening to kill her if Cheng does not surrender.
In a pivotal moment, Bao appears and sacrifices herself to save Ye from Mao. Overwhelmed by Bao's death, Cheng erupts in grief and shoots Mao, ending him, before making an exit with Bao in his arms. But the theatre is surrounded by Japanese soldiers. Cheng, Bao, and Xiaopang seek shelter in a car, only to fall under fire as the car is ambushed, ending their lives in a final, devastating blaze of resistance.
